Olympic Premiums Drive Year-End Yields for Sydney Hotel Room Rates, Reports Arthur Andersen Survey

Rutger Smits, Director of Hospitality & Leisure Services, Arthur Andersen, Australia commented, "The story as far as Sydney hoteliers are concerned was positive for 2000; however, with the Olympic year behind us, we understand the industry to be refocusing on core business activities, identifying areas of competitive advantage and making a concerted effort to maximise the leverage obtained through last year's media spotlight."

All other markets surveyed by Arthur Andersen also recorded rooms yield growth during 2000. Adelaide and Melbourne were steady performers, with growth in both room rates and occupancy. "The Melbourne market appears to be absorbing last year's supply increases and is on track to continue steady growth during 2001," Smits said.

Performance for Brisbane, Cairns and the Gold Coast is much more encouraging than last year. For Brisbane, a marginal increase in occupancy and room rate is set to accelerate with a series of special events during 2001 including the Goodwill Games and the Commonwealth Heads of Government Meeting in September and October. The Gold Coast displayed relatively strong occupancy growth of 3.1 percent and yield increases of 4.4 percent, boosted by a recovery in Asian inbound visitation throughout 2000.

Perth continued to endure strong room rate competition during 2000, with a decline of 1.1 percent to AUD$115. Demand remained strong, increasing occupancy by 4.4 percent across the year. Hoteliers are anxious for room rates to improve before new supply comes on line.

Growth in domestic business travel and international tourism during 2001 will distribute hotel demand more evenly as the country re-adjusts to "normal" travel patterns. Increased competition in the aviation industry is likely to benefit East Coast destinations, and Adelaide to a lesser extent, with some industry concern of a decline in travel to long haul domestic destinations, where airfares are less competitive.

The Hotel Industry Benchmark Survey provides contributors with an independent third party insight into market trends by benchmarking performance month on month. Launched in 1996 as the definitive source of hotel performance data outside North America, the Arthur Andersen Hotel Industry Benchmark Survey comprises information gathered from more than 4,000 hotels in 200 markets across 140 countries. The survey currently tracks hotel performance everywhere outside North America. Regional surveys are produced for Asia Pacific, Europe and the Middle East and North Africa. These are supported by in-depth country/city reports for Australia, Germany, South Africa, the UK and London. Arthur Andersen will continue to expand the coverage of the Hotel Industry Benchmark Survey during 2001 to report on more markets, including Hobart and New Zealand.

Arthur Andersen's vision is to be the partner for success in the new economy. The firm helps clients find new ways to create, manage and measure value in the rapidly changing global economy. With world-class skills in assurance, tax, consulting and corporate finance, Arthur Andersen has more than 77,000 people in more than 80 countries who are united by a single worldwide operating structure that fosters inventiveness, knowledge sharing and a focus on client success. Since its beginning in 1913, Arthur Andersen has realized 87 years of uninterrupted growth, with 2000 revenues of USD$8.4 billion. Learn more at .